Disappointing Statistics Fuel Global Energy Demand Worries

As major petroleum producers gather this week to decide whether to raise supply, investors took in a gloomy prognosis for fuel consumption and the statistics showing a worldwide industrial slowdown.

WTI crude futures had down by 67 cents, or 0.7 percent, to $93.22 per barrel as of 0421 GMT, while Brent crude futures had fallen by 77 cents, or 0.8 percent, to $99.26 per barrel. Since July 14, the benchmark price of American oil has dropped as low as $92.42 a barrel. According to a report by senior market analyst Edward Moya of OANDA, crude prices fell as a profusion of factory activity data showed the globe is going towards a big global economic recession, and in anticipation of higher oil supply following a very excellent earnings season for oil corporations.

Concerns over a possible recession increased on Monday when surveys from the US, Europe, and Asia revealed that manufacturers failed to gain momentum in July. Production was held down by China’s rigorous COVID-19 regulations and waning worldwide demand.

Should We Prepare for a Shock in the Market?

Two out of eight OPEC+ sources surveyed indicated that the meeting on August 3 would consider a minor increase for September. Saudi Arabia will press OPEC+ to expand oil output during the summit.

Haitong Futures experts stated that oil prices’ rising impetus has been ebbing over time. Oil should lead the slide in commodities once the supply and demand situation worsens. In the meantime, the US imposed sanctions on Chinese and other companies on Monday to put more pressure on Tehran to curtail its nuclear program.

The likelihood that Nancy Pelosi, the Speaker of the US House, would travel to Taiwan despite Beijing’s warnings against it also casts a shadow over the market. Since a prominent American official hasn’t visited the island in over 25 years, the visit might increase tensions between the United States and China.